KUALA LUMPUR: CIMB Equities Research said BERJAYA CORPORATION BHD []'s HK$3.5 billion (RM1.3 billion) proposal to take its 55.5%-owned Cosway private is pricey by Malaysian standards.
The research house said on Monday, July 11 that BCorp is paying HK$1.10 (RM0.42) cash per ordinary share and HK$1.10 per ICULS, which works out to 33 times CY12 P/E, more than double Amway's 15x CY12 consensus EPS.
'However, we note that Cosway has strong long-term prospects given its robust growth and scalable business. The privatisation could dilute FY12-14 EPS by 1% to 7.3% but the impact is much lower in FY14 because of the anticipated strong growth of Cosway,' it said.
CIMB Research said it was maintaining its numbers pending completion of the deal but changed its valuation method for Cosway from 8x P/E to marked-to-market.
'This increases our SOP-based target price from RM1.38 to RM1.42 even though we raise our SOP discount from 30% to 45%. The stock remains a HOLD,' it said.
The research house said on Monday, July 11 that BCorp is paying HK$1.10 (RM0.42) cash per ordinary share and HK$1.10 per ICULS, which works out to 33 times CY12 P/E, more than double Amway's 15x CY12 consensus EPS.
'However, we note that Cosway has strong long-term prospects given its robust growth and scalable business. The privatisation could dilute FY12-14 EPS by 1% to 7.3% but the impact is much lower in FY14 because of the anticipated strong growth of Cosway,' it said.
CIMB Research said it was maintaining its numbers pending completion of the deal but changed its valuation method for Cosway from 8x P/E to marked-to-market.
'This increases our SOP-based target price from RM1.38 to RM1.42 even though we raise our SOP discount from 30% to 45%. The stock remains a HOLD,' it said.
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